The volcano, in the middle of North Island, erupted just before midnight (1200 Monday GMT), the first significant activity at the site since 1897, the official monitoring body GNS Science said.

Police said witnesses reported "flame-like explosions and a cloud of ash coming from a new hole in the side of the mountain".

"I could see this big cloud, it looked like a fist, basically, at an angle across the sky," truck driver Bryn Rodda told Radio New Zealand. "At about the wrist section of the fist there was an orange ball of flash that I saw."

Police said they had no reports of injuries or damage but would check huts in the remote area which are used as shelter by hikers.

While Civil Defence did not order any evacuations, it advised residents beneath the cloud to stay indoors with windows and doors sealed.

Air New Zealand said domestic flights to Gisborne, Rotorua, Taupo, Napier and Palmerston North were affected.

"We will not fly through ash and are constantly taking guidance from the CAA (Civil Aviation Authority) and the MetService to ensure we can continue to carry passengers where safe routes and altitudes are available," the airline said in a statement.

The CAA said international flights were not expected to be disrupted, as they cruised above 20 000 feet.

Police said several highways in North Island were initially closed due to poor visibility and reopened Tuesday morning.

GNS Science volcanologist Michael Rosenberg said the volcano was being closely monitored.

"This eruption caught us by surprise. We've been monitoring the area after earthquakes, but we didn't expect this," he tld TVNZ.

"This might just be a quiet period and we should expect it to start again at any time. So we are watching things very closely."